Idaho residents cut back personal consumption expenditures during the recession by a greater percentage than all but two other states.
Estimates from the U.S. Bureau of Economic Analysis show Idahoans reduced their per capita personal consumption spending 5.8 percent between 2007 and 2009. Nationally the reduction in per capita personal consumption spending was less than 1 percent. Only Nevada with a reduction of 7.9 percent and Arizona with a reduction of 6.4 percent posted greater cutbacks.
Nationally, per capita personal consumption spending on the essential items rose 3.6 percent between 2007 and 2009 – $523 to $14,874 – while spending on nonessentials fell 4.4 percent – $791 to $17,191. Twenty-four states and the District of Columbia saw per capita personal consumption continue to increase during that period.
In most states, per capita spending declined for nonessential items to offset continued increased spending for the essentials – food at home, gasoline and energy, health care, housing and utilities.
Idaho, however, is one of only six states where per capita personal consumption spending fell for both essentials and nonessentials. Idaho’s 3.3 percent drop in per capita personal consumption spending in essentials – $575 to $13,418 – was the largest decline except for Nevada’s 3.9 percent reduction. The state’s 8.1 percent cut in nonessential spending – $1,257 to $14,268 – was exceeded by four other states.
Idahoans cut per capita spending for housing and utility costs from $6,071 to $5,753, or 5.2 percent, to cover a $187 per capita increase in health care costs – 6.6 percent to $4,012 in 2009. The reduction in spending on housing and utilities was the third steepest in the country.
They also cut their food spending $119 to $2,484 per capita, or 4.6 percent, and decreased gasoline and energy spending by over 15 percent to $1,169 per capita. Idaho was one of just three states where food spending was cut, and its 4.6 percent reduction was the deepest of the three.
Since 2009, Idaho’s per capita personal consumption spending has increased with essential items rising faster. Spending on essentials rose 11 percent by 2012 compared to a 10.1 percent increase nationally. Idaho’s per capita spending reflected a further, albeit slight, 0.3 percent decrease in housing and utilities, reflecting the persistence of low housing costs after the housing bubble burst in 2006.
But spending was up 4.8 percent on food as the U.S. Department of Agriculture’s estimate of Idaho households facing food insecurity in 2012 hit 14.3 percent. The 2.7 percentage point increase from 2009 was greater than all but six other states, according to the Agriculture Department report.
Health care spending in Idaho was up 17 percent – the fourth largest increase behind North Dakota, South Dakota and South Carolina. Nationally, health care spending rose 11 percent per capita.
Energy saw the largest Idaho increase among the essentials at nearly 59 percent from 2009. Only North Dakota, Oklahoma and the District of Columbia had greater increases. The national increase was 43 percent.
Idaho’s per capita spending on nonessentials rose 7.2 percent between 2009 and 2012, and at $15,301 was only $77 higher than in 2007.
Changes in personal consumption expenditures followed the state’s per capita personal income, which ranked 44th nationally in 2007, but after falling 4.3 percent by 2009 – the fifth steepest decline nationally – per capita income rose just 9 percent by 2012 to $34,481 to rank Idaho 50th among the states and the District of Columbia. Only seven other states posted smaller increases between 2009 and 2012.
Bob.Fick@labor.idaho.gov, regional economist
(208) 332-3570 ext. 3628